CALDERWOOD & HARKNESS LLP Attorneys at Law
1301 K Street NW, Suite 1200 Washington, DC 20005
Telephone: (202) 654-8800 Facsimile: (202) 654-8801
April 14, 2025
VIA OVERNIGHT COURIER AND EMAIL
Broadview Surety Corp. 175 Water Street, Suite 2400 New York, NY 10038
Attention: Bond Claims / Surety Discharge Department
Re: Request for Discharge of Injunction Bond No. BSC-2025-TRO-04419 Issued in Connection with Cascade Retail Holdings Inc. v. Rathore et al., C.A. No. 2025-0198-MTZ (Del. Ch.) Bond Amount: $2,500,000.00
Dear Sir or Madam:
This firm serves as outside litigation counsel to Cascade Retail Holdings Inc. ("CRH"), a Delaware corporation publicly traded on the Nasdaq Global Select Market under the ticker symbol CRHL, with principal executive offices located at 2200 Elliott Avenue West, Suite 3400, Seattle, Washington 98119 (EIN: 91-2847351). This matter is being handled under Calderwood & Harkness LLP matter number 1038-00006.
The purpose of this letter is to make a formal request, on behalf of CRH in its capacity as principal, for the discharge and release of injunction bond No. BSC-2025-TRO-04419 (the "Bond") in the face amount of Two Million Five Hundred Thousand Dollars ($2,500,000.00), issued by Broadview Surety Corp. ("Broadview") on or about March 7, 2025, on behalf of CRH as principal. As set forth in greater detail below, the underlying temporary restraining order that necessitated the posting of the Bond has been rendered moot by the parties' comprehensive settlement of the underlying litigation, and the Bond is no longer necessary to secure any obligation of CRH. We respectfully request that Broadview take all steps necessary to effect the full discharge, release, and cancellation of the Bond upon entry of the Consent Order described herein.
Background — The Underlying Litigation and Temporary Restraining Order
On March 5, 2025, CRH filed a Verified Complaint and an accompanying Motion for Temporary Restraining Order and Preliminary Injunction in the Delaware Court of Chancery, in the action captioned Cascade Retail Holdings Inc. v. Priya Rathore, Sameer Gupta, Lian Chen, Marcus D. Holt, Jessica Fremont, Tariq Okonkwo, Danielle Reeves, Kevin Matsuda, and Verdana Commerce Group, Inc., C.A. No. 2025-0198-MTZ, assigned to Vice Chancellor Margaret T. Zhao (the "Action").
The Verified Complaint asserted claims against eight former CRH employees—led by Priya Rathore, CRH's former Senior Vice President of Merchandising—and Verdana Commerce Group, Inc. ("Verdana"), a direct competitor of CRH in the omnichannel retail sector. Specifically, CRH alleged the following causes of action: (i) breach of restrictive covenant agreements entered into by the individual defendants during their employment with CRH; (ii) breach of confidentiality and non-disclosure obligations owed by each individual defendant under the terms of their respective employment agreements and CRH's Information Security and Trade Secret Protection Policy; (iii) misappropriation of trade secrets in violation of the Delaware Uniform Trade Secrets Act, 6 Del. C. §§ 2001–2009; (iv) tortious interference with contractual relations against Verdana for knowingly inducing the individual defendants to breach their post-employment restrictive covenants and confidentiality obligations; and (v) civil conspiracy among all defendants to orchestrate the coordinated departure of key merchandising personnel and the misappropriation of proprietary CRH merchandising strategies, vendor analytics, and pricing algorithms.
On March 7, 2025, Vice Chancellor Zhao granted CRH's ex parte application for a Temporary Restraining Order (the "TRO"). The TRO restrained all eight individual defendants from commencing employment, consulting, or advisory engagements in any merchandising, procurement, or vendor-relations capacity at Verdana Commerce Group, Inc. for a period of fourteen (14) calendar days, subject to extension upon motion by CRH. As a condition of the TRO, and consistent with Court of Chancery Rule 65(c), Vice Chancellor Zhao required CRH to post an injunction bond in the amount of Two Million Five Hundred Thousand Dollars ($2,500,000.00) to secure any damages that the defendants might sustain if it were subsequently determined that the TRO had been wrongfully issued. Broadview issued Bond No. BSC-2025-TRO-04419 on March 7, 2025, to satisfy this requirement, and the original bond instrument was filed with the Register in Chancery on the same date.
Settlement of the Litigation and Entry of Consent Order — Basis for Discharge
Following the issuance of the TRO, the parties engaged in expedited discussions aimed at resolving the dispute on a comprehensive basis. On March 18, 2025, the parties participated in a full-day mediation session before the Honorable Philip Ashford (Ret.), conducted through Meridian ADR Services LLC in Wilmington, Delaware. As a result of those mediation efforts, the parties reached a comprehensive settlement framework on March 20, 2025, subject to the execution of definitive documentation.
On March 21, 2025, the parties jointly presented a Consent Interim Order to Vice Chancellor Zhao, which was entered on the docket that same date. The Consent Interim Order maintained the status quo among the parties—including certain voluntary standstill commitments by the individual defendants and Verdana—while adjourning the preliminary injunction hearing that had been scheduled for March 28, 2025, in order to permit the parties sufficient time to negotiate and execute definitive settlement documentation.
Today, April 14, 2025, the parties executed a Standstill and Settlement Agreement (the "Settlement Agreement") among CRH, the eight individual defendants (Priya Rathore, Sameer Gupta, Lian Chen, Marcus D. Holt, Jessica Fremont, Tariq Okonkwo, Danielle Reeves, and Kevin Matsuda), and Verdana Commerce Group, Inc. The Settlement Agreement provides for, among other things, modified restrictive covenant terms that are mutually acceptable to all parties, the return of all CRH proprietary materials, mutual general releases, and agreed-upon compliance and monitoring protocols. The terms of the Settlement Agreement are confidential as between the parties.
Concurrently with the execution of the Settlement Agreement, the parties filed with the Delaware Court of Chancery a Stipulation of Settlement and Proposed Consent Order (the "Consent Order"), which incorporates and effectuates the material terms of the Settlement Agreement. The Consent Order requests that Vice Chancellor Zhao retain jurisdiction over the Action for purposes of enforcing the terms of the settlement and resolving any disputes arising thereunder. A copy of the filed Stipulation of Settlement and Proposed Consent Order is enclosed herewith for Broadview's records and review.
Also on today's date, CRH filed a Motion to Dissolve the Temporary Restraining Order Upon Entry of the Consent Order (the "Motion to Dissolve"). The Motion to Dissolve requests that the Court dissolve and vacate the TRO entered on March 7, 2025, effective upon the entry of the Consent Order. None of the defendants have opposed, or intend to oppose, the Motion to Dissolve. A copy of the filed Motion to Dissolve is likewise enclosed herewith.
Upon entry of the Consent Order by Vice Chancellor Zhao, the Consent Order will supersede and replace the TRO in its entirety, rendering the injunction bond no longer necessary to secure any obligation of CRH in connection with the Action. The underlying restraint originally imposed by the TRO will be dissolved by operation of the Consent Order, and the obligation secured by the Bond will be fully extinguished.
Formal Request for Discharge of Bond No. BSC-2025-TRO-04419
In light of the foregoing, CRH, as principal on Bond No. BSC-2025-TRO-04419, hereby formally requests that Broadview Surety Corp. discharge, release, and cancel the Bond in full upon entry of the Consent Order by the Delaware Court of Chancery.
In support of this request, CRH represents and confirms the following:
1. No claim has been made against the Bond by any defendant or any other party since the Bond was issued on March 7, 2025.
2. To CRH's knowledge, after consultation with counsel, no defendant or other party intends to assert, or has threatened to assert, any claim against the Bond.
3. The Settlement Agreement executed today by all parties to the Action contains mutual general releases that encompass any claims that any defendant could have asserted against the Bond.
4. Upon entry of the Consent Order by Vice Chancellor Zhao, the TRO will be dissolved and vacated in its entirety, and the underlying obligation secured by the Bond—namely, the potential liability of CRH for damages sustained by the defendants as a result of the issuance of the TRO—will be extinguished.
5. There is no remaining legal or factual basis for the Bond to remain in force, and its continued maintenance would impose unnecessary cost and administrative burden on CRH as principal.
Accordingly, we respectfully request that Broadview process this discharge request and take all steps within its control to effect the formal cancellation and termination of the Bond at the earliest practicable date following entry of the Consent Order.
Enclosures
For Broadview's convenience and reference, the following documents are enclosed with this letter:
1. Copy of the Motion to Dissolve the Temporary Restraining Order Upon Entry of Consent Order, filed with the Delaware Court of Chancery on April 14, 2025;
2. Copy of the Stipulation of Settlement and Proposed Consent Order, filed with the Delaware Court of Chancery on April 14, 2025;
3. Copy of the original Order Granting Temporary Restraining Order, entered by Vice Chancellor Zhao on March 7, 2025.
Please note that a conformed copy of the entered Consent Order will be forwarded to Broadview promptly upon receipt from the Register in Chancery. We anticipate that Vice Chancellor Zhao will enter the Consent Order within approximately five to ten business days of filing, although the precise timing is, of course, within the Court's discretion.
Confirmation Request and Next Steps
We respectfully request that Broadview confirm in writing—by letter or email directed to the undersigned—its acknowledgment of this discharge request and its agreement to proceed with the discharge and cancellation of the Bond upon entry of the Consent Order. If Broadview requires the completion of any particular forms, the execution of any discharge agreements or releases, or the submission of any additional documentation in order to effectuate the formal cancellation of the Bond, we ask that Broadview provide such forms or identify such requirements at its earliest convenience so that we may attend to them promptly.
Upon discharge, we request the return or cancellation of the original bond instrument. If Broadview's standard practice is to mark the original instrument as "cancelled" and return it to the principal, we would appreciate receiving the cancelled instrument at the offices of Calderwood & Harkness LLP at the address set forth above, with a copy to CRH's General Counsel.
We further note that any premium adjustments, refunds, or credits resulting from the early termination and discharge of the Bond prior to the expiration of its original term should be communicated directly to CRH's General Counsel, Theresa Yun-Park, at the following address, with a copy to Calderwood & Harkness LLP:
Theresa Yun-Park General Counsel Cascade Retail Holdings Inc. 2200 Elliott Avenue West, Suite 3400 Seattle, WA 98119
Email: tyunpark@cascaderetail.com
Contact Information for Further Communication
Should Broadview have any questions regarding this discharge request, or should Broadview require any additional information or documentation in connection with the processing of the discharge, please do not hesitate to contact any of the following individuals:
Bernard Crawford, Partner Calderwood & Harkness LLP 1301 K Street NW, Suite 1200 Washington, DC 20005 Telephone: (202) 654-8834
Email: bcrawford@calderwoodharkness.com
James Underwood, Associate Calderwood & Harkness LLP 1301 K Street NW, Suite 1200 Washington, DC 20005 Telephone: (202) 654-8871
Email: junderwood@calderwoodharkness.com
Theresa Yun-Park, General Counsel Cascade Retail Holdings Inc. 2200 Elliott Avenue West, Suite 3400 Seattle, WA 98119 Telephone: (206) 443-2200
Email: tyunpark@cascaderetail.com
We appreciate Broadview's prompt attention to this request and its cooperation throughout the duration of Bond No. BSC-2025-TRO-04419. We look forward to receiving Broadview's written confirmation and completing the discharge process in an efficient and orderly manner.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Bernard Crawford Partner
cc: Theresa Yun-Park, General Counsel, Cascade Retail Holdings Inc. cc: James Underwood, Associate, Calderwood & Harkness LLP
Enclosures:
1. Motion to Dissolve the Temporary Restraining Order Upon Entry of Consent Order (filed April 14, 2025)
2. Stipulation of Settlement and Proposed Consent Order (filed April 14, 2025)
3. Order Granting Temporary Restraining Order (entered March 7, 2025)